MOBILE MARKETING ECOSYSTEM REPORT 2018, INDIA Foreword Since the last time we saw you there have been dramatic shifts in multiple areas. Demonetization in India saw massive uptake on digitization of payments, and Trump took over the presidency in the US. In the same period, Reliance Jio changed the Telecom ecosystem in India by adding 200+ million new mobile subscribers, shaping it’s vision of “Internet for Every Indian”. We also saw 4G in India becoming mainstream, on both network and smartphone tech adoption, it completely dominated the market. 4G featurephone is an innovation that will take the India market by storm and will stay for long. Lower data cost caused massive growth in data consumption via mobile devices. Gaming, OTT Video and Digital Audio platforms became the flag bearers of increasing data trac. India saw the launch of seven big OTT platforms in the last 2 years (namely Netflix, Amazon Prime, Hotstar, Voot, Zee5, Sony Liv and Wynk). With the growing OTT consumption and the need of vernacular content, we think in the next 5 years’ vernacular content users will grow 12X compared to 2X growth for English content consumers. Gaming is another category showing growth in India, as it caters to not only to seasoned gamers, but also casual gamers like kids on their parents phones. Also, by introducing relevant native ad formats like reward videos, gaming has become a top contender for marketers to spend on. In 2017, 70% of India’s digital advertising budget was spent on mobile, wherein traditional FMCG and BFSI brands also saw uptake in something as advanced as programmatic spend. In this report we give all marketers a quick peak on a basic guide on how programmatic works and its pros and cons, and its future evolution. With the second edition of the report, we bring you up-to date on the latest trends in data growth, content play, programmatic, device status; how India is moving towards a new era of mobile marketing, seeing rampant growth in both usage and spends. We hope you like our? eorts and do share your feedback on what you want in the next report. Happy Reading! Table of Content 1: Key Trends and Insights Page 01 2: Part I: Reach of Mobile among Consumers in India Page 03 3: Part II: Mobile Handset Ecosystem in India Page 10 4: Part III: Basics of Programmatic Advertising Page 15 5. Part IV: Key Verticals driving the Mobile Advertising Page 23 a) Gaming Page 23 b) Vernacular Page 27 c) OTT Video Page 32 d) OTT Audio Page 43 6: Part V: Mobile Ad Spends in India Page 46 7: Appendix Page 48 8: MOSTT - Marketing Organization Structire Think Tank Page 51 9: SAVE Page 53 10: How Mobile Marketing Can Boost Brand Engagement Page 56 11: Smarties India 2018 Winners Page 59 12: MMA India Board Page 60 13: Objective & Methodology of Research Page 61 Acknowledgement (About Researchers and Contributors) Page 62 Disclaimer Key Trends and Insights The Jio Brigade! Since its launch in August 2016, Jio added 200+ million users, representing 18% of the mobile subscribers market in India. Jio helped establish 4G in India making it aordable for people of all financial backgrounds. Competitive telecom brands had to decrease their data costs by 40% so that their current customers don’t opt for/get a MNP (Mobile Number Portability) to Jio. Being the first 4G network in India, Jio now holds 40% of the broadband trac in India and it will keep on growing exponentially. 4G now holds approximately 82% of the data payload in the country! As 2G users decrease with every passing month, 3G and 4G will lead the mobile internet path till 2019 before we see the launch of 5G. Since the launch of 4G in late 2015, the total data payload grew 7.5x and 2.4x in 2016 and 2017 respectively. The 4G monthly data consumption is 3.8x greater than 3G data usage. 4G will lead the growth curve, although 3G will also continue to grow in the years to come. Compared to Urban India, Rural India is bringing three times more people online! India added 67 million mobile internet users in 2017,out of which 44 million were from Rural India. Rural India’s mobile internet users saw a 19% YoY growth, almost triple the 6% YOY growth Urban India. India will cross 500 million mobile internet users by the end of 2018, we foresee that this growth will be led by the rural populace. OTT platforms majorly engulf data traffic! OTT audio and video combined reach more than 200 million users in India. Video takes the largest share of the pie of content consumed on mobile internet, projecting a growth from 49% in 2016 to 75% in 2021. OTT players are creating original content and also including international content, which is helping them gain newer audiences and increase view time. Additionally, Indian YouTubers are creating great content that has also increased video viewing in India. Growing time spent on these platforms has also led to more advertising inventory. This also makes ads on video platforms more receptive due to its good content value. The OTT market will keep on growing as good content and good vernacular content is created for audiences from all regions. Mobile Marketing Ecosystem Report 2018, India. 01 Mobile Gaming - the next big thing for Indian marketers! Why gaming you ask? Because 84% of mobile subscribers have games on their devices. Mobile gaming in India is high due to freemium games and free access and the segment will continue growing at the rate of CAGR 87% till 2020. Interestingly, this boom occurred with the help of female gamers who spent 70 mins a day playing games on their mobile devices. 34% of Indian mobile gamers make in-app purchases, mostly paved by card and strategy games. For marketers gaming is a platform which helps in reaching a varied audience, that aren’t accessible anywhere else. In the next 5 years Chat Application, Government Sites and Digital Payments will lead to more vernacular content consumers online! The Indian language internet users have grown from 42 million in 2011 to 234 million in 2016, a 4x growth, almost double from the 2x growth seen in the English language internet users. This has happened due to major online platforms like e-commerce and social media platforms launching their content in vernacular languages, reaching out to a much bigger and diverse Indian audience. It is anticipated that vernacular language users will increase 12 folds by 2021 and this will only be possible if OEMs create keyboards that are available in all languages, as currently 70% of vernacular content consumers find it tough to work with an English keyboard on their mobile device. The average monthly mobile spends reduce! The 4G data surge led people to use more data than voice. Furthermore, lower data package costs helped reduce mobile spends. This led to a 21% drop in ARPU (Average Revenue per User). We think in the coming years as more and more people use data to make calls, voice spends will decrease as will the average mobile spends. Featurephones are here to stay! Contradicting all predictions, featurephone* shipments remained higher than smart- phone shipments and they are equally an urban phenomenon as they are a rural one. With featurephones equipped with better quality cameras, more RAM and storage space at half the price of the smartphone, people prefer investing in them instead of a smartphone. Soon Jio and Micromax will be launching a 4G featurephone that will cost less than 2k. With these updates, featurephones are here to stay for the long term. *The definition of featurephone is given in detail in the appendix Mobile Marketing Ecosystem Report 2018, India. 02 Part I: Reach of Mobile among consumers in India India ahead of China and expected to add over 200 Mn new subscribers by 2020 20%1 of the total mobile subscribers globally now reside in India. By 2020, 27% of new subscribers added globally will be from India - making India the largest contributor globally to the mobile economy, placing India significantly ahead of other emerging economies such as Indonesia and Brazil, who contribute to less than 5% of new subscriber growth. Global markets by additional subcribers, 2016 -2020 Mobile Subscribers in India ( in Millions) (Million) 1186 1167 Percentage of new subscribers globally 1127 1131 Rural 1035 Urban 1013 980 27% 21% 5% 4% 3% 2% 2% 2% 2% 1% 944 Total 206 662 680 668 629 588 155 551 562 579 506 499 506 465 447 418 432 392 35 27 23 18 18 16 16 10 India China Brazil Nigeria Indonesia USA Pakistan Mexico Bangladesh Ethopia Dec 2014 June 2015 Dec 2015 June 2016 Dec 2016 June 2017 Dec 2017 May 2018 Since the advent of Reliance Jio, India had added over 3 times2 more subscribers compared to its subscriber growth since 2014. Subscriber growth came from both urban and rural markets - with 53 million rural and 79 million urban new mobile subscribers added during the period. Reliance Jio gained a whopping Access service provider-wise market shares in term of wireless subscribers 18% market share within 6 months of TATA 2.4% launch; the Top 3 telcos continued to BSNL 10.0% grow too Bharti Airtel 30.5% In the last 2 years there is minimal Reliance Jio 18.2% decrease in the top three Telecom players in India. With the incoming of Jio, the top three Telecom players rarely saw major impact (downturn) Idea 18.9% Vodafone on their numbers.